By 2020, there will be over 20 billion things connected to the internet. By 2025, it will include 100 billion things. Within one decade, the digital world will be 10 times bigger than it is today, and all of these activities will require a new infrastructure to support them.
“Civilization infrastructure is the convergence of the digital world with the newly connected world of critical infrastructure to meet the needs of a digital society,” said Jorge Lopez, vice president and distinguished analyst at Gartner Symposium/ITxpo 2016 in Orlando, Florida. “The way we design, build, manage and maintain energy, water, air lanes, roads, food and security will dramatically improve. New areas will be considered infrastructure, including digital services like search and social media.”
For example, things have already started to become economic agents in their own right, exchanging information and executing transactions independently. For example, automobile internal systems already perform ongoing monitoring, notification and scheduling of auto repair. Enterprises will have to learn how to engage, market and sell to things on their terms — for example, things will not have brand loyalty or be susceptible to emotional appeals.
Things have already started to become economic agents in their own right.
This new infrastructure will need to support the blending of the physical and digital worlds, and it must be able to support rapid growth, particularly in networks and monitoring systems and devices that respond to the environment. The current critical infrastructure, which includes assets essential to the function of society like electric plants and telecommunications, will not be able to support this new load.
Current digital giants (for example, Amazon, Facebook, Alibaba and Google) will not necessarily remain dominant, as they mainly focus on connections between people and businesses, mostly within two or three infrastructure domains. CIOs should understand the five domains of civilization infrastructure and potential tectonic shifts so they can set digital business strategies.
Nodes are the people, things, business, accounts systems and digital entities that are connected by and interact over networks and physical infrastructure. The next era of digital business will see the growth of things and digital entities. Things will not simply act as extensions of people the way devices do today. They will use built-in intelligence to act independently, sometimes even initiating transactions, according to Mr. Lopez. In the future, this will include wearables that anticipate when a person is about to have a heart attack and preemptively send an ambulance. Nodes have connections, the value of which only increases as the number of links increases.
Assets will include much of what businesses currently view as assets, but digital assets will be monetized and exploited in new ways. This includes cryptocurrencies, titles and claims, licences and grants, and copyright and performance rights. Assets will be exchanged, and governed by laws, but self-regulation will be embedded into the structure (i.e. blockchain).
Connections are the part of the infrastructure that enables the delivery and transport of physical goods and services, as well as data. This domain will include six groups of networks: energy and water networks, digital networks, commerce networks, transportation networks, governmental networks, and logistics networks. Advanced technologies in each of the networks, plus increased intelligence, will improve the capacity to operate, maintain and reinvest.
“A new form of economics will emerge from these connections, where the creation of value comes from the density of connections and the new markets they create,” said Mr. Lopez.
Algorithms will play a critical role in digital business as they grow more intelligent. This software takes input data and transforms it into specific outlets. Algorithms will be essential in automation, learning (i.e. machine learning), differentiation (high-speed trading algorithms) and integrated systems (i.e. point algorithms).
The digital/physical convergence will introduce new structures to ensure order and security. For example, governments will need to create policies for digital business such as laws that require utility companies to buy excess power for solar-powered homes. Legally, judges will have to decide who is at fault if a failing sensor causes an accident. International and industry associations will create new frameworks for governance, and enterprises will need to look into new security policies.
CIOs must look to see how the expanded scale of digital business will affect the current enterprise and decide what can be done today. For example, run a digital business planning scenario that envisions a digital world at least 10 times bigger than today’s. Determine how this expanded scale affects the enterprise’s competitive position and assess opportunities to expand on your enterprise’s’ capabilities.